Complaint

IN THE CIRCUIT COURT OF THE TWENTY-SECOND JUDICIAL CIRCUIT
MCHENRY COUNTY, ILLINOIS

CIVIL ACTION
Michael R. Linton and
Peggy M. Linton,
Pro Se Plaintiffs,
vs.
Popular Financial Services, LLC, Case No.: ____________________
Popular Financial Holdings
Popular ABS, Inc., a Delaware corporation Complaint For Declaratory Relief,
Equity One, Inc., a Delaware corporation Injunction and Damages
Popular Mortgage Servicing, Inc., a Delaware corporation
Popular ABS Mortgage Pass-Through Trust
Deutsche Bank National Trust Company
Deutsche Bank AG, New York Branch
Deutsche Bank Securities Inc
Mortgage Electronic Registration Systems Inc.
Codilis and Associates, P.C.
Lender Sales of Illinois, LLC
Elite Financial Services
21st Century Mortgage Bankers
Stewart Title of Illinois
Kimball Hill Homes
and Does 1-1000
Defendants
COMPLAINT FOR DECLARATORY RELIEF, INJUNCTION AND DAMAGES
Comes now, MICHAEL R. LINTON AND PEGGY M. LINTON, Pro Se Plaintiffs
and hereby files their Complaint for Declaratory Relief, Injunction and Damages, pursuant to
Illinois rules of civil procedure 735 ILCS 5.
STATEMENT OF THE PARTIES
1. Pro Se Plaintiff Michael R. Linton is an adult natural person living in Volusia County,
Florida.
2. Pro Se Plaintiff Peggy M. Linton is an adult natural person living in Volusia County,
Florida.
3. Plaintiffs Michael R. Linton and Peggy M. Linton were borrower’s on two mortgage loans
in the amount of $318,778.00 and $78,637.21 to 21st Century Mortgage Bankers, Inc.
secured by real estate located at 6622 Waterford Dr., McHenry, Illinois with the legal
description as follows:
LOT 12 IN SHAMROCK FARMS SUBDIVISION – NEIGHBORHOOD 9

BEING A SUBDIVISION OF THE SOUTHEAST QUARTER OF SECTION 31
AND PART OF THE SOUTH HALF OF SECTION 32, TOWNSHIP 45 NORTH,
RANGE 8 EAST OF THE THIRD PRINCIPAL MERIDIAN, AND PART OF THE
NORTHWEST QUARTER OF SECTION 5, TOWNSHIP 44 NORTH, RANGE 8
EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT
THEREOF RECORDED NOVENBER 7, 2002 AS DOCUMENT NUMBER
2002R0103434, IN MCHENRY COUNTY, ILLINOIS
4. Defendant Popular Financial Services LLC is a foreign Limited Liability Company doing
business in Illinois.
5. Defendant Popular Financial Holdings is a Delaware Corporation and is believed to house
the legal department for other affiliated defendants.
6. Defendant Popular ABS, Inc. is a Delaware Corporation and is a transaction participant
with the role as “Depositor”
7. Defendant Equity One, Inc. is a Delaware Corporation and is a transaction participant with
the role as “Sponsor and Servicer”
8. Defendant Popular Mortgage Servicing, Inc. is a Delaware Corporation and is a
transaction participant with the role as “Subservicer for 100% of the mortgage loans to be
included in the mortgage pool”
9. Defendant Popular ABS Mortgage Pass-Through Trust is believed to be an affiliated trust
of Popular ABS, Inc and is a transaction participant with the role as “Issuing Entity”
10. Defendant Deutsche Bank National Trust Company is a foreign corporation and is a
transaction participant with the role as “Trustee”
11. Defendant Deutsche Bank AG, New York Branch is a foreign corporation and is a
transaction participant with the role as “Swap Counterparty”

12. Defendant Deutsche Bank AG, New York Branch is a foreign corporation and is a
transaction participant with the role as “Cap Counterparty”
13. Defendant Deutsche Bank Securities Inc. is a foreign corporation and is a transaction
participant with the role as “Underwriter”
14. Defendant Mortgage Electronic Registration Systems Inc. is a foreign corporation and is a
transaction participant with the role as “nominee for 21st Century Mortgage Bankers.”
15. Defendant Codilis and Associates, P.C is an Illinois corporation and is a transaction
participant with the role as “Attorney” and on the day of their admission to the bar
association, they agreed to uphold the laws of the United States.
16. Defendant Lender Sales of Illinois, LLC is an Illinois Limited Liability Company and is a
transaction participant with an unknown role.
17. Defendant Elite Financial Services is an Illinois Corporation and is a transaction
participant with the role as “Mortgage Broker”
18. Defendant 21st Century Mortgage Bankers is an Illinois corporation and is a transaction
participant with the role as “lender”
19. Defendant Stewart Title of Illinois is an Illinois corporation and is a transaction participant
with the role as “Settlement Agent”
20. Defendant Kimball Hill Homes is an Illinois Corporation and is a transaction participant
with the role as “Seller/Builder.”
21. Defendant Does 1 – 1000 persons or entities that are unknown to plaintiffs. Their
capacities are unknown. Plaintiffs allege that they are in some way involved in the actions
complained of herein as either independents actors, investors, or as agents or principals of
the other named defendants. Plaintiffs will amend this complaint to allege their true
identities, capacities and roles as and when they are ascertained.
JOINT VENTURE LIABILITY
22. Plaintiffs reallege all prior paragraphs as if set out here in full.
23. Defendants Popular Financial Services LLC, Popular Financial Holdings, Popular ABS,
Inc., Equity One, Inc., Popular Mortgage Servicing, Inc., Popular ABS Mortgage Pass-
Through Trust, Deutsche Bank National Trust Company, Deutsche Bank AG, New York
Branch, Deutsche Bank Securities Inc., Mortgage Electronic Registration Systems Inc.,
Codilis and Associates, P.C., Lender Sales of Illinois LLC, Elite Financial Services, 21st
Century Mortgage Bankers, Stewart Title of Illinois, Kimball Hill Homes and Does 1 –
1000 persons or entities are part of a joint venture as defined by controlling law.
24. Each member of a joint venture is jointly and severally liable for any tortuous act of any
member of the joint venture against the Plaintiffs Michael R. Linton and Peggy M. Linton.
25. As a result of the Defendants and Joint Venturers actions, the Plaintiffs Michael R. Linton
and Peggy M. Linton have been injured and damaged in that the plaintiffs have lost their
home resulting in financial and emotional damages including mental anguish.
26. The Plaintiffs Michael R. Linton and Peggy M. Linton claim all damages as allowed by
law for the wrongful acts of the Defendants and joint venturers against them.
STATEMENT OF THE FACTS
27. On January 30, 2006, Plaintiffs Michael R. Linton and Peggy M. Linton closed on the
single family residence located at 6622 Waterford Dr., McHenry, Illinois
28. Plaintiffs purchased the property located at 6622 Waterford Dr. from Defendant Kimball
Hill Homes.
29. Plaintiffs obtained a loan from Elite Financial Services.
30. According to the HUD-1 Settlement Statement, the Mortgage and Note, the named lender
was 21st Century Mortgage Bankers, Inc.
31. The Real Estate Closing took place at the offices of Stewart Title of Illinois located at 350
Congress Parkway, Crystal Lake, Illinois
32. The loan closing(s) took place, and the deed was transferred. A policy of title insurance
was issued to Plaintiffs as owners of the property.

33. The “Lender” caused the “mortgage” on Plaintiffs property to be transferred to a pool of
mortgages and/or notes on various properties, real and/or personal, that were included in
an asset pool that was eventually securitized and sold to other defendants in the chain of
securitization who acquired rights and obligations to the note, mortgage, and stream of
revenue eventually due to Does 1-1000.
34. The “loan closing” was in fact a scheme to trick Plaintiffs into issuing a negotiable
instrument that was pre-sold to investors as an unregulated security. The parties and their
fees were not revealed nor was the true APR disclosed, as it was inflated considerably by
the intentional overstatement of the appraisal on the property.
35. The Defendants entire scheme was intended to trick investors into investing their capital
into securities that were unregistered and unregulated, using the borrowers’s signature as
the issuer of the negotiable instrument which was perceived to give an inflated value to
the derivative security purchased by those victimized investors.
36. This inflation of value was an exact reflection of the inflation of value that Defendants and
its co-conspirators paid for when they hired an appraiser for the loan closing.
37. The Defendants in previous litigation, have failed to state the name or address of the
holder in due course, Does 1-1000, being the holders of certificates of asset backed
securities, which are backed by the security instrument (mortgage) on the subject
residential property.
38. The Defendants have committed a fraud upon this court in regards to McHenry County
case # 07 CH 0287 ,which has only become apparent to the Plantiffs within the last day,
upon discovery that the “lender” bank and others have engaged in a pattern of fraud and
deception across the country and the state of Illinois in attempting to foreclose residential
properties AFTER it has already been paid in full PLUS a fee for standing in as an
undisclosed lender.
39. In regards to case # 07 CH 0287 ,Defendants’s allegations that the lender has not been
paid are false is easily ascertainable by the 10k and 8k filings with Plaintiff’s sworn filings
with the SEC, wherein the description of the instant loan transaction fits exactly with ALL
loans that were securitized and eventually sold in shares to investors around the world. It
was not until the last day that Michael R. Linton and Peggy M. Linton consulted with a
knowledgeable consultant and attorney who informed them and demonstrated the fraud.
Plaintiffs assumed that because the lender refused to accept payment that the allegation
they were making was that they had not received any payment on the note, when in fact,
they had already been paid in full long before this action was commenced and
contemporaneously with the loan closing. The “lender” did not disclose that the loan had
been paid, and did not disclose that the true holder in due course and the parties in
possession of indorsement or the note itself have long since been owners of these
mortgage documents, and in fact mislead the borrowers and the Court to believe the
contrary. The Linton’s were only able to discover this fact upon consulting with an expert
who advised them that the pattern and policy of “Lender” was to treat ALL loans in this
manner and that by granting “Lender” the right to foreclose the court was essentially
giving the “Lender” the money AND the property.
40. In fact, based upon the sworn filings of the Defendants with a Federal Agency under the
Securities and Exchange Act of 1933, Defendants admit payment and it is clear that
Payment occurred either PRIOR to the loan closing or within days after the loan closing
took place. According to those filings full payment PLUS a fee of 2.5% was paid to
Defendants by a mortgage aggregator, the “lender” never entered the loan on its balance
sheet or in its filings with the FDIC, or any regulatory agency or even to its shareholders,
because the transaction was classified as a service transaction represented solely on
Defendant’s income statement.
41. Defendants filed the foreclosure action, and took title to the property in addition to having
been paid in full PLUS a fee for standing in for the mortgage aggregator, who was the real
lender, unregistered in the State of Illinois to do business as an investment bank.

41.1. The aggregator took title as Trustee of a mortgage pool to which many loans
were assigned, not necessarily all real estate.
41.2. The aggregator purportedly assigned but did not record some interest in the
note and mortgage in the instant action to a Special Purpose Vehicle which was
owned and operated by an investment bank.
41.3. The SPV was established by a CDO (collateralized debt obligation) manager
employed by the investment bank.
41.4. The CDO manager established what are known as tranches within the SPV and
assigned parts of each pool to each tranche within the SPV.
41.5. The hierarchy of tranches guarantees and requires a misapplication of funds
out of and contrary to compliance with the terms of the subject mortgage security
instrument and note.
41.6. The subject pieces of the pool, that includes pieces of the subject mortgage and
note, were then pledged to the buyers of certificates of debt instruments that were
backed by and in substance convertible into equity shares of ownership of the subject
mortgage and note.
41.7. Each buyer received a share of the subject mortgage and note along with a
share of thousands of other mortgages and notes.
41.8. Each buyer was shown a AAA securities rating, insurance from AMBAC or
similar entity and a credit default swap that guaranteed payment of the revenue flow.
41.9. Thus co-obligors were created, which Lender failed to disclose at any time to the
borrowers or this Court and failed to plead that the holder of the note had not been
paid despite overcollateralization of the negotiable instruments and the creation of a
reserve pool to make payment, insurance, guarantees, and credit default swaps.
42. If the note was separated from the mortgage, then the mortgage is unenforceable by
definition. If the mortgage is unenforceable by definition then any “foreclosure sale” is

either void or voidable. Thus a cloud on title exists even in the presence of the Court’s
Judgment to the contrary.
PREDATORY LENDING PRACTICES
44. Plaintiffs were targeted and steered into a sub-prime mortgage even when it may have
been possible that the Linton’s could have qualified for a mainstream loan.
45. Plaintiffs were targeted to “Loan Flipping” as evidenced by the multiple appraisals and
loan applications.
46. Plaintiffs were asked to complete an online application and then were instructed to sign
an application or documents containing blanks that the loan officer says he will fill in
later.
47. Plaintiffs were steered and pressured into accepting a high risk loan with an unusually
high interest rate and extremely high pre-payment penalties. It was later discovered by
Plaintiff that the high pre-payment penalty was to insure that the loan would not be paid
off early to protect Elite Financial Services illegal kickback, described as a Yield Spread
Premium that was paid by the “Lender” for referring Plaintiffs to “Lender”.
48. Elite Financial coerced Plaintiffs into accepting this high-risk loan with its unusually high
and abusive prepayment penalties by telling them that they had made money on the
property because the seller/builder was going to continue to take price increases. The
Plaintiffs were told that they could refinance the loan shortly after closing and the pre-
payment penalty would be covered by Elite Financial with their Yield Spread Premium.
49. Plaintiffs were told that the appraisal even mentioned the builders price increase.
50. After the closing, Elite Financial had the Plaintiffs apply for a new mortgage and ordered
another appraisal from a different appraiser. The new amount was for approximately
$14,000.00 more than the first appraisal.

51. The Plaintiffs were told that Elite Financial could not make enough “Premium on The
Back End” to cover the pre-payment penalty so they could not refinance the loan as
promised.
52. As a result of the Defendants and Joint Venturers predatory lending practices, the
Plaintiffs Michael R. Linton and Peggy M. Linton have been injured and damaged in that
the plaintiffs have lost their home resulting in financial and emotional damages including
mental anguish.
FRAUD IN THE INDUCEMENT
55. Defendant Elite Financial Services presented Plaintiffs and Seller/Builder with a letter of
Prequalification with Credit Review.
56. Defendant Elite Financial Services presented to Plaintiffs the Federal Truth-In-Lending
Disclosure stating that the Plaintiffs would not have to pay a prepayment penalty.
57. Plaintiffs gave builder a total of $16,147.00 as down payment to build the home located at
6622 Waterford Dr., McHenry, Illinois.
58. Defendant Elite Financial did not disclose the prepayment penalty until it was too late to
change the loan terms. If Plaintiffs did not close on the loan they would lose the
$16,147.00 down payment.
59. Defendant Elite Financial coerced Plaintiffs into closing by offering to refinance the loan,
since they have already made money on the property, to eliminate the prepayment penalty
after closing as evidenced by multiple appraisals and loan applications.

60. Fraud in the inducement has occurred as Defendants misrepresentation lead plaintiffs into
entering the loan transaction with the false impression of the risks.
61. As a result of the Defendants and Joint Venturers acts of fraud in the inducement, the
mental anguish.
APPRAISAL FRAUD
64. The property that was purchased by the plaintiffs through the seller/builder was in a
subdivision of tract housing consisting of similar properties.
65. The name of the model that was purchased is called the “Ultima.”
66. The original appraisal was inflated by using comparable properties that were outside the
recommended guidelines of standard appraisal practice.
67. As stated on the appraisal “Comparable #1 is further than the 1 mile guideline…”
68. As stated on the appraisal “Comparable # 2 is more dated than preferred (over the 6 month
guideline) and adjusted for the builders price increase.”
69. Comparable # 3 was not even in the same subdivision.
70. The “Ultima” is one of the most popular models that is built by the seller/builder. There
were plenty of “Ultima’s” that had previously closed in the subdivision. There was no
need to stray from the guidelines to artificially inflate the price of the home.
71. If the property did not appraise, the plaintiffs should have been made aware of the facts by
a truthful appraisal.
72. In fact, the property did not increase in value as promised by defendants. The Defendant’s
entire scheme collapsed because the builder filed for chapter 11 bankruptcy protection (as
evidenced by case No. 08-10095 in the United States Bankruptcy Court Northern District
of Illinois Eastern Division) and immediately started “slashing prices” on existing
inventory in the subdivion.
73. Because of the artificially inflated home value based on a misleading appraisal, the
plaintiffs were unable to refinance with a conforming loan due to the fact that the home
would not appraise to the original purchase price.
74. As a result of the Defendants and Joint Venturers acts of appraisal fraud, the Plaintiffs
Michael R. Linton and Peggy M. Linton have been injured and damaged in that the
plaintiffs have lost their home resulting in financial and emotional damages including
mental anguish.
USURY
77. As a result of the artificially inflated “fair market values” utilized by LENDER et al, its
agents, servants and/or employees, to induce the borrower to sign the mortgage documents
and purchase the property, the effective yield now vastly exceeds the legal lending limit in
the State of Illinois.
78. As a result of the Defendants and Joint Venturers acts of usury, the Plaintiffs Michael R.
Linton and Peggy M. Linton have been injured and damaged in that the plaintiffs have lost
their home resulting in financial and emotional damages including mental anguish.
FRAUD IN THE EXECUTION
81. The Plaintiffs did not receive an accurate good faith estimate from the “Lender” 21st
Century Mortgage Bankers, as required by 12 Code of Federal Regulation, Section
226.18(c) and 12 USC §2601 et seq.
82. Since this action was commenced, Defendants continued and so continues to violate the
Consumer Credit Protection Act, Title 15 United States Code, Section 1601 et seq., and
Regulation Z, Title 12 Code of Federal Regulations, Part 226, which was adopted
pursuant to such Act, by failing to properly make the disclosures required by the Act and
Regulation Z, as herein after more particularly set forth.
83. Defendants failed to disclose in or with the disclosure statements, because no disclosure
statements were given, the amount of the balance to which the rate was applied and an
explanation of how that balance was determined and further failed to disclose the fact that
the balance is determined without first deducting all credits and payments made and
payments as required by Title 12 Code of Federal Regulations, Section 226.4 et seq.
84. Defendants failed to give the required sentences in various loan documents and have
signed by the Plaintiff, as required by 15 USC §1601 et seq. and Title 12, Regulation Z,
Part 226 et seq.
85. Defendants (s) failed to disclose to Plaintiffs that the loan obtained has an interest rate
higher than the rate reflected in the Preliminary Disclosures and do not fall within the
tolerances as required by 12 USC §2601 et seq.
86. By reason of the foregoing, Defendants failed to make the disclosures required by 15 USC
§1601 et seq. and Title 12 Code of Federal Regulations, Section 226.18, clearly and
conspicuously in writing, in a form that Plaintiffs could keep as required by 15 USC

§1601 et seq. and Title 12, Code of Federal Regulations, Section 226.18. As a proximate
result of the foregoing, the Plaintiffs herein has the right to rescind the entire transaction.
87. Defendants failed to disclose in or with the acceleration statement the amounts, itemized
and identified by type, of charges other than finance charges debited to the account during
the acceleration period as required by Title 12 Code of Federal Regulations, Section
226.21.
88. As a result of the Defendants and Joint Venturers acts of fraud in the execution, the
mental anguish.
FRAUD IN THE FACTUM
91. The Defendants, in their failure to state the name or address of all parties to the
transaction, misrepresented the entire transaction and caused the Plaintiffs to enter into the
transaction without the opportunity to accuratelty realize the risks, duties or obligations
incurred. Plaintiffs were not given the opportunity to learn of the fraudulant character or
terms in the transaction.
92. As a result of the Defendants and Joint Venturers acts of fraud in the factum, the Plaintiffs
mental anguish.
law for the wrongful acts of the Defendants and joint venturers against them, including
voiding the instrument under state law.
TRUTH IN LENDING VIOLATIONS
95. The failure to disclose the real parties, and all the fees paid to the undisclosed parties is a
violation on the face of TILA, the contract between the parties, the Good Faith Estimate
provided to the borrowers, and fair dealing, in addition to a breach and in fact total
abdication of the fiduciary duty owed by a lender to its borrower in which underwriting
standards were reduced to zero because the nominal lender did not perceive itself to be at
risk.
95.1. This includes the undisclosed purchase of insurance that qualifies as mortgage
insurance, credit default swaps that qualify as mortgage insurance, and guarantees
from third parties, including but not limited to the mortgagors whose negotiable
instruments were also assigned to tranches that had lower priority than that which the
subject loan transaction was assigned, and the payments made by borrowers were in
fact allocated and given not to the holder in due course of the subject mortgage and
note, but to the CDO manager for allocation to tranches and securities which held a
higher place in the hierarchy of the tranches within the SPV.
96. The Federal Truth-In-Lending disclosure provided by Elite Financial shows an APR of
8.175. This figure is inaccurate by more than the allowed amount of .00125. The Good
Faith Estimate does not disclose the APR.
97. The Federal Truth-In-Lending Disclosure Statement provided by Elite Financial shows
that the borrowers will not have to pay a pre-payment penalty.

98. Because of the aforementioned items, the finance charges have been understated on the
necessary disclosures. According to TILA, the finance charges must be accurate, up to
certain tolerances. If the lender has started foreclosure proceedings, either judicial or non-
judicial, the tolerance is $35.
99. As a result of the Defendants and Joint Venturers violation of the Truth-In-Lending Act,
the Plaintiffs Michael R. Linton and Peggy M. Linton have been injured and damaged in
that the plaintiffs have lost their home resulting in financial and emotional damages
including mental anguish.
100. As a result of the Defendants and Joint Venturers violation of the Truth-In-Lending Act,
the Plaintiffs Michael R. Linton and Peggy M. Linton hereby exercise their extended right
of rescission and therefore demand rescission according to 15 USC §1635(f); Reg Z
§§226.15(a)(3), 226.23(a)(3). Liability for violating TILA runs to the lender. Once the
loan is sold, the liability, as related to rescission, extends to the assignee as well. 15 USC
§1641(c). The regulations set up a three-step process to rescind a loan.
100.1. First, the borrower must notify the lender, in writing, of the cancellation of the
loan. While the notice must be in writing, it can be transmitted by mail, telegram, or
other means. Reg Z §§226.15(a)(2), 226.23(a)(2). This notice is herby given to lender
et al, in this complaint.
100.2. Once the loan is rescinded, the security interest or lien becomes automatically
void, by operation of law. 15 USC §1635(b); Reg Z §§226.15(d)(1), 226.23(d)(1).
The note also is voided. The lender’s interest in the property is “automatically
negated, regardless of its status and whether or not it was recorded or
perfected.” Official Staff Commentary §§226.15(d)(1)–1, 226.23(d)(1)–1.
100.3. Within 20 days of receipt of the notice of cancellation, the lender must return
to the borrower any money or property that has been given to anyone in connection
with the loan. 15 USC §1635(b); Reg Z §§226.15(d)(2), 226.23(d)(2). The lender
must also take steps to reflect that the security interest has terminated.
101. The Plaintiffs Michael R. Linton and Peggy M. Linton claim Attorney fees, as well as
actual and statutory damages. 15 USC §1640(a).
102. The Plaintiffs Michael R. Linton and Peggy M. Linton claim all damages as allowed
by law for the wrongful acts of the Defendants and joint venturers against them.
RESPA VIOLATIONS
104. Plaintiffs did not receive the Special Information Booklet that is required under
RESPA for purchase transactions. This booklet contains important consumer information
in regards to settlement services.
105. Plaintiffs never received a Good Faith Estimate that disclosed all of the Fees that were
paid by various defendants.
106. Plaintiffs were “forced” to close at Stewart Title by the Seller/Builder Kimball Hill
Homes. Section 9 of RESPA prohibits a seller from requiring the home buyer to purchase
title insurance from a particular title insurance company, either directly or indirectly, as a
condition of sale. Buyers may sue a seller who violates this provision for an amount equal
to three times all charges made for the title insurance.
107. Elite Financial Services was paid a Yield Spread Premium from 21st Century Mortgage
Bankers of $3,187.78 which equates to 1% of the mortgage amount. This premium was
not based on services rendered, as Plaintiffs paid an origination fee in the amount of
$1,593.89 to Elite Financial, an Underwriting Fee of $995.00 to 21st Century Mortgage
Bankers, an Application Fee of $295.00 to Elite Financial and a Processing Fee of
$495.00 to Elite Financial. The Yield Spread Premium was based on interest rate, not
services rendered, and represent a kickback for “referring” the Plaintiffs to 21st Century
Mortgage Bankers. RESPA prohibits the giving or receiving of any fee, kickback or other
thing of value for the referral of a “settlement service” (defined at 12 U.S.C. § 2602(3)
and 24 C.F.R. § 3500.2) Vargas v. Universal Mortgage Corp., 2001 U.S. Dist. LEXIS
6696, 6 (N. Dist. Ill. 2001); Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir.
1998).
108. Defendants policies and practices, as alleged herein, constitute: a. The giving of a
kickback or thing of value for the referral of settlement service business involving a
federally related mortgage loan in violation of Section 8(a) of the Real Estate Settlement
Procedures Act, 12 U.S.C. § 2607(a); and b. The giving of a portion or percentage of a
settlement service charge involving a federally related mortgage loan other than for
services actually performed in violation of Section (8)(b) of the Real Estate Settlement
Procedures Act, 12 U.S.C. § 2607(b).
109. As a result of the Defendants and Joint Venturers violations of the Real Estate
Settlement Procedures Act, the Plaintiffs Michael R. Linton and Peggy M. Linton have
been injured and damaged in that the plaintiffs have lost their home resulting in financial
and emotional damages including mental anguish.
law for the wrongful acts of the Defendants and joint venturers against them. There is a
private right of action for violation of § 2607 (Illegal referral fee or kickback and fee
splitting). Statutory damages: person charged for the settlement service can recover an
amount equal to “three times the amount of any charge paid for such settlement service,”
plus attorney’s fees and costs. 12 U.S.C. § 2607(d).
SECURITY VIOLATION
112. The subject mortgage was part of a purchase transaction in which the property was sold
with promises and assurances that the value would go up, the Defendants would assure a
return on investment, and that the Plaintiffs need not perform any work, since the
maintenance and other factors would be done by third parties — the Association, the
builder etc. Plaintiffs were also assured by Elite Financial and the Appraisal that the
seller/builder would continue to take price increases on remaining inventory thereby
increasing the value of subject property. In fact, Elite Financial went as far as trying to
talk Plaintiffs into refinancing after this loan closed within 60 days by ordering another
appraisal from a different appraiser showing an increase of $14,000.00. This constitutes,
despite the appearance of other “uses” the sale of a security under the Securities Act of
1933 and other applicable Federal and state Securities laws. The sale of this security was
improper, lacking disclosure, rights to rescind under the securities laws, and lacking in
disclosure as to the true nature of the transaction and the true position of the parties,
including but not limited to the fact that the “lender” was in actuality acting as a conduit,
removing the essential aspect of risk-sharing in the normal lender-borrower relationship,
that the risk of loss was not only real but unavoidable because of the artificially inflated
values, and that the Buyer should consider the purchase to be a high-risk investment with
the possibility of total loss.
113. The sale of THIS security was part of larger plan to sell securities to “qualified” investors
using false ratings and false assurances of insurance, together with a promised rate of
return in excess of the revenue produced by the underlying efforts.
114. The sale of THIS security was part of larger Ponzi scheme wherein securities were sold at
both ends of the spectrum of the supplier of capital (the investor) and the consumer of the
capital (the borrower and the seller of the property).
115. As a result of the Defendants and Joint Venturers Securities Violations, the Plaintiffs
mental anguish.
UNFAIR DEBT COLLECTION PRACTICES
118. Prior to March 6, 2007, Defendants Popular Financial Service’s, LLC hired co-
defendant Codilis and Associates, P.C to engage in debt collection services.
119. Part of the debt collection practices included letters that were mailed to Plaintiffs Michael
R. Linton and Peggy M. Linton via the United States Postal Service.
120. On or about March 6, 2007, Popular Financial Services, LLC, through their agent and
attorney Richard S. Spencer, Esq. of the Law Offices of Codilis and Associates, P.C
(hereafter “agent and attorneys”), caused this civil action, McHenry County Case # 07 CH
0287, for foreclosure and to “enforce loan documents” to be filed in this Court. For
purposes of this complaint, the referenced allegations of the Complaint are incorporated
herein by reference.
121. In sub-paragraph “N.” of paragraph 3 of the Complaint, Popular Financial Services, LLC ,
through their agent and attorneys, affirmatively represent to the Court that “The Plaintiff
(Popular Financial Services, LLC) is the legal holder of the indebtedness or the servicing
agent for the legal holder of the indebtedness”. This is a false statement that was made to
this court.
122. In paragraph “N” of paragraph 3, Defendants, through its agent and attorneys,
affirmatively represent to the Court that the mortgage was “subsequently” assigned to the
Defendant “by virtue of an assignment to be recorded” (that being some time in the
future). – THERE IS NO ASSIGNMENT OF MORTGAGE RECORDED.

123. In view of the foregoing, Popular Financial Services, LLC in this case and its agent and
attorneys knew or should have known, at the time they filed the Complaint (case # 07 CH
0287), that the foreclosure claim was legally nonexistent, and that any suit to foreclose on
the alleged note and mortgage would be a legally impossibility prohibited by law, and
further that the filing of any such action could not be in good faith or based on
representations of the client.
124. As such, both Defendants and its agent and attorneys knew or should have known, at the
time of the filing of the frivolous Complaint (case # 07 CH 0287), that the claim for
foreclosure was both not supported by the material facts necessary to establish the claim,
and also that the claim would not and could not be supported by the application of then-
existing law to the material facts.
125. Defendants inflated the acceleration fees without operation of law, which amounts to
usurious interest, in violation of Banking Law at 12 USC §2610 et seq.
126. Defendants failed to disclose the date by which or the time period within which the
new balance or any portion of the new balance must be paid to avoid additional finance
charges as required by Title 12 Code of Federal Regulations, Section 226.18(p).
127. Defendants has further failed to give proper notice of Notice of Default and Right to
Cure and acceleration of the loan transaction as required by 12 USC §2601 et seq. and 15
USC §1601 et seq.
128. Since the time filing aforementioned foreclosure action, the defendants together have
illegally pursued and received an order ejecting the Plaintiffs from their home while
representing to the court that their actions were lawful and that Popular Financial
Services, LLC had the present right, ownership and authority to pursue both foreclosure
and eviction.
129. Popular Financial Services, LLC, through their agent and attorney Richard S. Spencer,
Esq. of the Law Offices of Codilis and Associates, P.C appeared before the Court and
represented to the Court that they had the right to foreclose and eject Plaintiffs from their
home.
130. As will be further shown, defendants conspired together to wrongfully foreclose on the
Plaintiffs home and to eject them from their home.
131. The defendants contend and have represented to this Court that Popular Financial
Service, LLC is the true holder of said mortgage and therefore has foreclosed in
accordance to Illinois law and their rights under the security agreement.
132. The plaintiffs contend that said sale was wrongful, illegal, in violation of law and the
documents governing the relationship between the Plaintiffs and the owners of the
Plaintiffs mortgage.
133. The Plaintiffs contend that the foreclosing entity lacked standing to initiate a foreclosure
and that the foreclosure is void or at least voidable and that no title has passed to Popular
Financial Services, LLC and Joint Venturers.
134. The Plaintiffs allege that the actions of the foreclosing entity were wrongful and
tortious.
135. The Plaintiffs allege that the actions of the defendants in ejecting them from their home
and wrongfully foreclosing is a violation of law, wrongful and tortious and that
Defendants hold no title to the property and that defendants actions constitute trespass,
negligence, wantonness, abuse of process and slander of title.
136. The Plaintiffs allege that the actions of Defendants and Joint Venturers were a civil
conspiracy to deprive the Plaintiffs of their property. Additionally, defendants were
engaged in a civil conspiracy to falsify legal documents for the purpose of foreclosing on
the homes of individuals under a colorable title of right for the purpose of generating
profits and income from the act of depriving individuals of their homes and for the
purpose of unjustly enriching the participants of the joint venture at the expense of the
unsuspecting and unknowing.

137. As a result of the Defendants and Joint Venturers Unfair Debt Collection practices, the
mental anguish.
NEGLIGENCE
140. Defendants and Joint Venturers negligently ejected the Plaintiffs from their home they
rightfully own since the foreclosure proceeding executed by the Law Offices of Codilis
and Associates, P.C is void or at least voidable.
141. As a result of the Defendants and Joint Venturers Negligence, the Plaintiffs Michael
R. Linton and Peggy M. Linton have been injured and damaged in that the plaintiffs have
lost their home resulting in financial and emotional damages including mental anguish.
WANTONNESS
144. Defendants and Joint Venturers with reckless indifference to the consequences,
consciously, intentionally and maliciously acted to eject the Plaintiffs from the home that
they rightfully owned.
145. Defendants and Joint Venturers with reckless indifference to the consequences,
consciously, intentionally and maliciously instituted this action with the knowledge that
the home of the Plaintiffs does not belong to Popular Financial Services, LLC as stated in
case # 07 CH 0287.
146. These actions were taken with reckless indifference to the consequences, consciously,
intentionally and malicious actions to increase the profits for Defendants and Joint
Venturers.
147. As a result thereof, Defendants and Joint Venturers are liable for all natural, proximate
and consequential damages due to their wantonness as well as punitive damages upon a
proper evidentiary showing.
148. As a result of the Defendants and Joint Venturers actions of Wantonness, the Plaintiffs
mental anguish.
TRESPASS
151. After wrongly foreclosing on the Plaintiffs home and ejecting them, Defendants and
their agents unlawfully entered the lands of the Plaintiffs in McHenry County, Illinois.
152. As a result of the said trespass the Plaintiffs, Michael and Peggy Linton, have been
deprived of the peaceful enjoyment of their property.
153. Because of the willful and oppressive nature of these actions, the Plaintiffs claim
punitive damages as allowed under the law.
154. As a result of their trespass Defendants are liable for all natural, proximate and
consequential damages due their trespass as well as punitive damages upon evidentiary
showing.
155. As a result of the Defendants and Joint Venturers Trespass, the Plaintiffs Michael R.
ABUSE OF PROCESS
158. The Law Offices of Codilis and Associates, P.C at the direction and control of Popular
Financial Services, LLC and other Joint venturers maliciously obtained the issuance of the
writ or process of ejectment, from the Circuit Court of McHenry County, Illinois and had
it served upon the Plaintiffs.
159. The Law Offices of Codilis and Associates, P.C, Popular Financial Services, LLC and
other Joint venturers abused the writ of process because they ejected the Plaintiffs from
their home with the knowledge that the Plaintiffs are the rightful owners of their home and
that The Law Offices of Codilis and Associates, P.C, Popular Financial Services, LLC and
other Joint venturers had no right to act against them.
160. As the proximate result of The Law Offices of Codilis and Associates, P.C, Popular
Financial Services, LLC and other Joint venturers abuse of the said writ of process, the
Plaintiffs were caused to suffer injuries and damages, also reasonable attorney’s fees
incurred in defending the abusive writ.
161. As a result of the Defendants and Joint Venturers Abuse of Process, the Plaintiffs
mental anguish.
SLANDER OF TITLE
other Joint venturers, in filing an action of foreclosure and obtaining a Judicial Deed –
which is void – has caused a cloud to be placed on the title of the property of the
Plaintiffs.
165. As a result of the Defendants and Joint Venturers Slander of Title, the Plaintiffs
mental anguish.
RESPONDEAT SUPERIOR LIABILITY
167. Plaintiffs reallege all prior paragraphs as if set out here in full
168. Popular Financial Services, LLC and other Joint venturers hired, directed or controlled the
actions of The Law Offices of Codilis and Associates, P.C and it employees and
associates.
169. The Law Offices of Codilis and Associates, P.C serves at the leisure of Popular Financial
Services, LLC and/or is part of the joint venture with Co-defendants. These parties are
alleged to, upon information ascertained from documents filed with the SEC and upon
belief, to be engaged in a civil conspiracy to engage in the conduct which is unlawful for
the purpose of unjustly enriching the members of the Joint Venture.

170. Popular Financial Services, LLC and other Joint Ventureres are liable in tort for all of the
wrongful actions of it’s agent, employee or servants and co-defendant, The Law Offices of
Codilis and Associates, P.C.
171. As a result of the Defendants and Joint Venturers actions, the Plaintiffs Michael R.
WRONGFUL FORECLOSURE
other Joint venturers have completed a foreclosure proceeding against the Plaintiffs,
Michael R. Linton and Peggy M. Linton, in violation of law.
175. The initiation of the foreclosure proceeding by The Law Offices of Codilis and
Associates, P.C, Popular Financial Services, LLC and other Joint venturers was either in
negligent or wanton, depending on proof adduced at trial.
176. As a result of the Defendants and Joint Venturers Wrongful Foreclosure, the Plaintiffs
mental anguish.
by law for the wrongful acts of the Defendants and joint venturers against them
UNJUST ENRICHMENT
179. The actions of The Law Offices of Codilis and Associates, P.C, Popular Financial
Services, LLC and other Joint venturers in foreclosing on the home of the Plaintiffs
Michael R. Linton and Peggy M. Linton in violation of law resulted in Defendants being
unjustly enriched by the payment of fees, insurance proceeds, and federal bail-outs.
180. Defendants have received the money and the property.
181. As a result of the Defendants and Joint Venturers Unjust Enrichment, the Plaintiffs
mental anguish.
by law for the wrongful acts of the Defendants and joint venturers against them
CIVIL CONSPIRACY
184. Defendants have developed an elaborate Ponzi scheme to swindle the Plaintiffs and
others across the United States of their money and property through the use of affiliated
business arrangements for the purpose of creating unregulated securities in an effort to
receive undisclosed kickbacks and fees.
185. Defendants have engaged in an unlawful combination and conspiracy to foreclose on
home loans against individuals for the purpose of unjustly enriching themselves in
violation of law.
186. As a result of this civil conspiracy, civil wrongs were committed against the Plaintiff
Michael R. Linton and Peggy M. Linton, and other consumers. The motivation for the
civil conspiracy was the Defendants greed.
187. As a result of the Defendants and Joint Venturers Civil Conspiracy, the Plaintiffs
Michael R. Linton and Peggy M. Linton, as well as other consumers have been injured
and damaged in that the plaintiffs have lost their home resulting in financial and emotional
damages including mental anguish.
RICO
190. As stated above there were multiple parties in multiple states in a scheme spanning
virtually all continents in which false, misleading and non-conforming statements were
made to investors and borrowers alike, wherein Defendants et al acted in concert with
other “lenders” and investment bankers to artificially create the appearance of higher
market values for property and the false appearance of trends that did not in actuality
exist, but for the “free money” (secured under false pretenses) pumped into a financial
system and real estate market consisting of false and deceptive high pressure sales tactics
whose objectives were to get the borrower’s signature without regard for the
consequences to either the borrower or the investor.
191. In doing the aforesaid acts, Defendants and each of them were participating in and have
participated in a scheme of racketeering as that term is defined in RICO, 18 U.S.C § §
1961 et seq.
192. Plaintiff is therefore entitled to the remedies available under RICO in civil actions.
PRAYER FOR RELIEF
WHEREFORE, The Plaintiffs Michael R. Linton and Peggy M. Linton, having set forth
their claims against the Defendants respectfully request of the Court as follows:
193. That this Court enter an Emergency Order to Vacate The Foreclosure Sale;
194. That this Court enter an Emergency Order demanding that the Defendants, each one of
them, deed the property back to the Plaintiffs Michael R. Linton and Peggy M. Linton;
195. That the Defendants be permanently enjoined from any and all further attempts to
foreclose on the subject real property unless and until Defendants can present proof that
they are entitled, under the laws of Illinois, to enforce the underlying promissory note, in
which a certified copy of the original note be attached to the complaint and the
ORIGINAL note with ORIGINAL SIGNATURES be subject to inspection by the
court.
196. That Plaintiffs Michael R. Linton and Peggy M. Linton have and recover against
defendants a sum to be determined by a jury of their peers in the form of actual damages;
197. That Plaintiffs Michael R. Linton and Peggy M. Linton have and recover against
defendants a sum to be determined by a jury of their peers in the form of punitive
damages;
198. That Plaintiffs Michael R. Linton and Peggy M. Linton be awarded treble damages as
allowed by law;
199. Rescission of the entire Mortgage and note amounting to clear title to property with
fixtures as a result of the aforementioned;
200. Voiding of the Security Instrument for fraud in the factum violations.
201. Damages as a result of the aforementioned violations, to be fixed and awarded by the
Court;
202. Damages for the Unfair and Deceptive Acts and Practices in the amount of $4000.00 for
each and every violation;
203. Damages in the amount of three times the interest paid and clear title to the property
stemming from the usurious interest;
204. Judgment against each Defendant for return of the down payment, and other payments, as
well as interest on the above amount;

205. Cost of litigation as provided in Title 15 United States Code, Section 1601 et. seq.;
206. Remedies available under RICO in civil actions;
207. Any other relief the court deems just and proper.
DEMAND FOR JURY TRIAL
THE PLAINTIFFS, Michael R. Linton and Peggy M. Linton hereby demand a trial by a
struck jury on all claims so triable before the court.
Respectfully submitted on the 6th day of January, 2009.
________________________________________________
Michael R. Linton and Peggy M. Linton / Pro Se Plaintiffs

1729 Creekwater Blvd.
Port Orange, FL 32128
(815) 271-5038
______________
Service List:
1. POPULAR FINANCIAL SERVICES, LLC

c/o THE CORPORATION TRUST COMPANY – Registered Agent
CORPORATION TRUST CENTER 1209 ORANGE STREET
WILMINGTON, DE 19801
(302)658-7581
2. POPULAR FINANCIAL HOLDINGS

ATTN: FRANCES KELLY / LEGAL DEPARTMENT
301 LIPPINCOTT DRIVE
MARLTON, NJ 08053
(856) 396-2300
3. POPULAR ABS, INC.

C/O WILMINGTON TRUST SP SERVICES, INC. – REGISTERED AGENT
1105 N. MARKET STREET SUITE 1300
(302)478-6160
4. EQUITY ONE, INC.

301 LIPPINCOTT DR.
MARLTON, NJ 08053
(800) 461-8643
5. POPULAR MORTGAGE SERVICING, INC.

121 WOODCREST RD.
CHERRY HILL, 08003
(800) 273-3973
6. DEUTSCHE BANK NATIONAL

1761 EAST ST. ANDREW PLACE
SANTA ANA, CALIFORNIA 92705
(800) 735-7777
7. DEUTSCHE BANK AG
60 WALL STREET
NEW YORK, NY 10005-2858
(212) 250-2500
8. DEUTSCHE BANK SECURITIES INC

C/O THE CORPORATION TRUST COMPANY
CORPORATION TRUST CENTER
1209 ORANGE STREET
(302) 658-7581
9. MERS
1818 LIBERTY STREET, SUITE 300
RESTON, VA 20190
(800) 646-6377
10. CODILIS AND ASSOCIATES P.C.

15 W 030 NORTH FRONTAGE ROAD, SUITE 100
BURR RIDGE, ILLINOIS 60527
(630) 794-5300
11. LENDER SALES OF ILLINOIS

1000 JORIE BLVD, STE 36
OAK BROOK, IL 60523
(630) 218-1299
12. ELITE FINANCIAL SERVICES
21 WEST ELM
CHICAGO, IL 60610
(312) 254-0404
13. 21ST CENTURY MORTGAGE BANKERS

350 E. OGDEN AVE
WESTMONT, IL 60559
PHONE UNKNOWN
14. STEWART TITLE OF ILLINOIS

350 CONGRESS PARKWAY UNIT L
CRYSTAL LAKE, IL 60014
PHONE UNKNOWN
15. KIMBALL HILL HOMES

5999 NEW WILKE RD
ROLLING MEADOWS, IL 60008
(630) 291-2755
16. POPULAR ABS MORTGAGE PASS THROUGH TRUST
C/O WILMINGTON TRUST SP SERVICES, INC. – REGISTERED AGENT
1105 N. MARKET STREET SUITE 1300
PHONE UNKNOWN

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IN THE CIRCUIT COURT OF THE TWENTY-SECOND JUDICIAL CIRCUIT

MCHENRY COUNTY, ILLINOIS

Michael R. Linton and

COMPLAINT FOR DECLARATORY RELIEF, INJUNCTION AND DAMAGES

Comes now, MICHAEL R. LINTON AND PEGGY M. LINTON, Pro Se Plaintiffs

Illinois rules of civil procedure 735 ILCS 5.

STATEMENT OF THE PARTIES

LOT 12 IN SHAMROCK FARMS SUBDIVISION – NEIGHBORHOOD 9

5. Defendant Popular Financial Holdings is a Delaware Corporation and is believed to house

the legal department for other affiliated defendants.

6. Defendant Popular ABS, Inc. is a Delaware Corporation and is a transaction participant

with the role as “Depositor”

the role as “Sponsor and Servicer”

8. Defendant Popular Mortgage Servicing, Inc. is a Delaware Corporation and is a

included in the mortgage pool”

9. Defendant Popular ABS Mortgage Pass-Through Trust is believed to be an affiliated trust

transaction participant with the role as “Trustee”

transaction participant with the role as “Swap Counterparty”

transaction participant with the role as “Cap Counterparty”

participant with the role as “Underwriter”

association, they agreed to uphold the laws of the United States.

transaction participant with an unknown role.

17. Defendant Elite Financial Services is an Illinois Corporation and is a transaction

participant with the role as “Mortgage Broker”

participant with the role as “lender”

with the role as “Settlement Agent”

with the role as “Seller/Builder.”

complained of herein as either independents actors, investors, or as agents or principals of

identities, capacities and roles as and when they are ascertained.

JOINT VENTURE LIABILITY

home resulting in financial and emotional damages including mental anguish.

STATEMENT OF THE FACTS

single family residence located at 6622 Waterford Dr., McHenry, Illinois

29. Plaintiffs obtained a loan from Elite Financial Services.

was 21st Century Mortgage Bankers, Inc.

Congress Parkway, Crystal Lake, Illinois

was issued to Plaintiffs as owners of the property.

revenue eventually due to Does 1-1000.

the intentional overstatement of the appraisal on the property.

the derivative security purchased by those victimized investors.

giving the “Lender” the money AND the property.

because the transaction was classified as a service transaction represented solely on

Defendant’s income statement.

lender, unregistered in the State of Illinois to do business as an investment bank.

were assigned, not necessarily all real estate.

owned and operated by an investment bank.

employed by the investment bank.

assigned parts of each pool to each tranche within the SPV.

41.5. The hierarchy of tranches guarantees and requires a misapplication of funds

instrument and note.

mortgage and note.

share of thousands of other mortgages and notes.

paid despite overcollateralization of the negotiable instruments and the creation of a

definition. If the mortgage is unenforceable by definition then any “foreclosure sale” is

Judgment to the contrary.

PREDATORY LENDING PRACTICES

$14,000.00 more than the first appraisal.

FRAUD IN THE INDUCEMENT

Prequalification with Credit Review.

6622 Waterford Dr., McHenry, Illinois.